Moving from principles to action for energy supply that mitigates
against climate change requires a long-term perspective. Energy
infrastructure takes time to build up; new energy technologies take
time to develop. Policy shifts often also need many years to take
effect. In most world regions the transformation from fossil to
renewable energies will require additional investment and higher
supply costs over about twenty years

future costs of electricity generation

Figure 5.88 shows that the introduction of renewable technologies under the Energy [R]evolution scenario significantly decreases the future costs of electricity generation compared to the Reference scenario. This difference will be less than $ 1.5 cent/kWh up to 2020, however. Because of high prices for conventional fuels and the lower CO2 intensity of electricity generation, electricity generation costs will become even more economically favourable under the Energy [R]evolution scenario and by 2050 costs will be $ 12.9 cents/kWh below those in the Reference version.

Under the Reference scenario, on the other hand, unchecked growth in demand, an increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s $ 282 billion per year to more than $ 830 billion in 2050. Figure 5.88 shows that the Energy [R]evolution scenario not only complies with Eastern Europe/Eurasia’s CO2 reduction targets, but also helps to stabilise energy costs and relieve the economic pressure on society. Increasing energy efficiency and shifting energy supply to renewables lead to long term costs for electricity supply that are more than 55% lower than in the Reference scenario.